After finishing the school of pipsology i choose the London open breakout strategy as my next strategy to study. I have chosen it based on the information stated in the personality tests like suitable time frame, trading technique etc.

In basic i made myself familiar with the strategy but i am still facing some difficulties. The most important is the risk:reward setting. Following the strategy the stop loss is to be but at the opposite side of the zone. The greatest problem that this is causing to me is that most of the times my stop loss is wider than the breakout movement of the London session.

Is there anyone out there who is using the London breakout strategy to who is willing to help me on track a bit?

Your questions does not contain enough information to give you a detailed answer. I don't even know what currency pair you are trading.

So I'll give you a general answer: back-test. Take your system, and test it on historical data to see where the most profitable place to put your stop-loss is.

Remember, 'most profitable' is not the same as 'never stopped out'. In many cases, getting stopped out early, when you are going to get stopped out anyway, and thus maintaining a higher R:R ratio, is better than a massive stop that is rarely hit but keeps your position size low.

One of the trading rules I wish I would have known when I first started. Every system, strategy, plan etc ...Works some of the time. . .NO system works all the time****This applies no matter how you trade; what you trade or when you trade. If you go back to the London strategy in a couple of years, you'll see "hey it does work some of the time, like everything else. You're new; lower the size of your trade then lengthen the distance to your stop a bit. The more you trade the better you get a placing stops, take profits, recognizing real breakouts as well as when to take the money. Good LuckGp

I am testing it on GBP/USD and EUR/USD, what i found out is that when conducting a back test i get much better results with a risk/reward of 1/4 than when i use the normal London Breakout stop of the opposite side of the zone. Because i get small stop outs verry often but once i have s profitable order it is very profitable that time.

I am in a situation were i feel a little bit steerless because i have learned in the school of pipsology to always follow the strategy but now i see that when doing things different then instructed i get better results.

Can someone give me some guidelines on how to proceed? Continue tweaking until i get the best backtest results? Consulting more information about the London breakout strategy?

I am in a situation were i feel a little bit steerless because i have learned in the school of pipsology to always follow the strategy but now i see that when doing things different then instructed i get better results.

I think you have misunderstood the advice. There is nothing wrong adjusting your strategy to improve profitability or adapt to changing market conditions. All successful traders do this, and you will spend your trading career constantly tinkering with your strategies. However, what you should not do is change or ignore your strategy 'in the moment' because you think you see a trading opportunity.

The first is a logical, strategic decision, whereas the second is an emotional, impulsive decision.

That really makes sense and helps me but i am still stuck in the dilemma of "why does a tweaked strategy from a guy who just finished the SOP give better backtest results than the original strategy as it is educated all over the website?"

Markets change. Each currency pair is different. Each person's psychology is different.

That last one is a really big deal. You are building a strategy that takes a string of small losses and the periodic big win. That's a perfectly valid strategy, but I would hate that. Give me smaller, more consistent wins any day. That doesn't mean that my plan will necessarily be more profitable than yours, but I'm much more likely follow a strategy that fits my psychology.

Constantly tweaking and adjusting a recurring trade plan to fit your psychology, your circumstances, and the instruments you trade is exactly the approach you should be taking.

My suggestion is that you start forward-testing; it is actually fairly easy to come up with a profitable trading plan with historical data. Implementing that plan in real-time is much harder, and will show you the holes in your plan in a way that back-testing won't.

Thank you Drekieyja, you made me feel more secure about my approach. Once i have found out a solid plan that fits my psychological needs you are more than right that i should start forward testing it(on demo of course).

If there are any people out there with specific recommendations regarding the Londen open breakout strategy they are more than welcome to share their trading plans, pro's cons' etc!

You're a good judge, then: you'll never go wrong, listening to Drekieyja's advice. He's one of the best advice-offerers in the forum.

It will also probably help and interest you (and maybe a lot) to read a book by Mark Fisher called "The ACD System".

I'm not suggesting you should use his system instead of the London Opening Range Breakout, but his book is all about "opening range breakout systems" and you'll find a great deal of helpful information in it, as well as several ideas you might be able to use as part of your opening range breakout system. It's a very solid, sensible, tried-and-tested method that's based on something real about the markets. It's not a forex book, but it's a trading book and it will help you.

Thank you Drekieyja, you made me feel more secure about my approach. Once i have found out a solid plan that fits my psychological needs you are more than right that i should start forward testing it(on demo of course).

Because this is a topic that comes up fairly regularly, I've posted my thoughts on developing trading plans here, in case anyone finds that useful.

Edit:

And while I've not read the book that @LaughingCharlie recommends, I do support the general sentiment. Once you find a general strategy or set of indicators that work for you, start digging deeply into the material on that topic written by the top traders. For me, John Bollinger's book on Bollinger Bands was one of the turning points in my 'career' as a trader. Forex trading is a game of inches, and the step from 'cursory knowledge' to 'deeper understanding' is often enough to put you into the black.